Citigroup Tells Congress It Will Refile Thousands of Foreclosure Documents

By Donal Griffin -
Nov 18, 2010

Citigroup Inc., which has proceeded
with foreclosures as some rivals stopped to recheck documents,
said it may need to refile affidavits in cases that began before
an overhaul of its procedures.

The lender is reviewing 10,000 affidavits that were
executed before a reorganization of foreclosure operations was
completed in February, Harold Lewis, a managing director with
the CitiMortgage lending unit said in written testimony for a
congressional hearing today. About 4,000 affidavits may not have
been signed before a notary and may be resubmitted, he said.

Citigroup has defended its procedures and continued to
seize homes after borrowers accused the country’s biggest banks
of seeking foreclosures without fully reviewing loan documents.
The New York-based bank’s overhaul improved training and limited
the volume of paperwork processed by staff, Lewis said. Flaws
uncovered don’t warrant a sweeping delay, he said.

“The changes and safeguards implemented this year give
Citi confidence that there are no systemic issues in its
existing foreclosure processes,” he said in comments to be
delivered at a House Financial Services Committee hearing on
foreclosures. “Citi has not suspended its foreclosure process
and believes there is no reason to do so.”

Probes, Hearings

Attorneys general in all 50 states began a coordinated
probe in October into whether banks and loan servicers used
false documents and signatures on foreclosures. Bank of America
Corp., the largest U.S. lender, and JPMorgan Chase & Co.
temporarily halted or delayed some repossessions to review their
practices. Wells Fargo & Co. said last month that it would file
new affidavits in about 55,000 proceedings in 23 states.

Lawmakers are questioning regulators and banking officials
about what actions they have taken to ensure that foreclosures
were fair and legal.

Executives from Charlotte, North Carolina-based Bank of
America, and New York-based JPMorgan were questioned by the
Senate Banking Committee Nov. 16. Regulators, including
officials from the U.S. Treasury Department and the Federal
Reserve, are also scheduled to testify at today’s hearing.

Lewis also said Citigroup is transferring 8,500 pending
files out of the Law Offices of David J. Stern PA, the Florida
foreclosure firm which has said it’s being investigated by the
state’s attorney general. Other legal counsel will prepare and
refile affidavits for those cases, Lewis said. The bank said
last month it had stopped using Stern.